Vivo Starts Tests on GSM Network

Brazil's largest mobile phone company Vivo has started tests on its new GSM network, newspaper Gazeta Mercantil reported.

Vivo, a joint venture between Spain's Telefónica and Portugal Telecom, announced at the end of June it would implement a GSM overlay on its CDMA network in a drive to attract customers from other GSM operators such as TIM Participações, Claro and Brasil Telecom.

Vivo has already set up its core central telephone exchanges and will soon start the second phase of installing radio base stations for the GSM overlay project.

Vivo will install 1,000 GSM radio base stations in São Paulo city and another 1,000 stations throughout the state, the newspaper reported.

Vivo expects to finish the entire overlay in the first quarter of next year as planned and on budget, Vivo's president Roberto Lima told analysts during a 3Q06 earnings conference call in October.

Vivo has earmarked 1.08bn reais (US$500mn) for the new infrastructure.

HANDSET SALES

Vivo intends to start selling GSM prepaid handsets in December in Brazil's industrial hub of São Paulo, according to the report.

Vivo has purchased 250,000 GSM handsets from suppliers such as US manufacturer Motorola, Finland's Nokia and South Korean electronics manufacturer LG.

The handsets are generally basic models and will be sold at affordable prices without subsidies, the newspaper reported.

"The complete network won't be available all at once, so the operator is not going to [GSM] sell phones to those who need total mobility [across the country]," Gazeta reported a sector specialist as saying.

Vivo posted a net loss in the third quarter of 2006 of 197mn reais, up 64% compared to a 120mn-real loss in 3Q05.

BNAmericas.com"

Posted to the site on 30th November 2006